VC investments in India more than doubled in September quarter: KPMG report

In India, VC investments grew to $3.6 billion in July-September from $1.5 billion in the June quarter, powered by mega deals that included the $1.3 billion raised by online retailer Flipkart.

“India continues to be attractive market for VC investors. With the impact of the pandemic and the new normal paving the way for disruption in business models, there is significant demand in the edtech, healthtech and fintech segments," said Amarjeet Singh, partner, KPMG in India.

Large tech investors focussed on India during the quarter under review.

In July, Google had announced a $10 billion fund to help accelerate India’s transition to a digital economy. The search engine giant is also making a $4.5 billion investment in Jio Platforms, following on Facebook’s $5.7 billion investment in the same company. Jio Platforms also made its own investments in Q3, including the acquisition of online pharmacy Netmeds in August.

With learning going remote, it was boom time for India's edtech sector, with four of the largest deals undertaken during the quarter gone by. These deals were - Byju’s ($500m), Unacademy ($150m), Eruditus Executive Education ($113m), and Vedantu ($100 million).

“The clear standout sector for VC investment in India has been edtech. This has been true for the past couple of quarters, but this quarter the list of deals just goes on and on...It’s a very hot area for investment and will likely remain so for some time," said Nitish Poddar, partner and national leader – private equity, KPMG in India.

According to the report, investment in Indian startups is expected to pick up substantially again by the end of the year.

Globally, about 4,861 VC deals worth $73.2 billion took place during July-Sepetmber, higher then $70 billion across 5,674 deals in the June ended quarter.

Late stage deals are expected to remain a top priority for VC investors, which will likely continue to make it difficult for early stage companies to attract investment.

Sector-wise, fintech, edtech, healthtech, and biotech will likely attract the bulk of investments.

IPO activity also picked up during the September quarter, with China-based Ant Financial filing IPO documents for listing on the HKSE in addition to AirBnb and Wish in the US.